The coal power price linkage mechanism may soon enter the stage of normalization

A few days ago, the State Council issued Several Opinions on Promoting the Reform of the Price Mechanism (hereinafter referred to as the "Opinions"), proposing that before liberalizing competitive electricity prices, it will "improve the coal power price linkage mechanism and benchmark electricity price system"
.
After many years of exploration, coal-power linkage may soon enter the stage of normalization
.

At the end of September, the China Thermal Coal Price Index was officially released
on the website of the National Development and Reform Commission's Price Monitoring Center.
The China Thermal Coal Price Index reflects the arrival price of 5,000 kcal of thermal coal received by coal-fired power plants in various provinces and regions across the country, and is publicly released to the public once a
month.
The index was released on a trial basis until the end of 2015 and officially released
in January 2016.

Li Ting, an expert in the coal market, said that the current difficulty in coal-power linkage is mainly the lack of an effective coal price reference, and the China Thermal Coal Price Index launched by the National Development and Reform Commission may be trying to solve this problem
.
As long as there is a reference coal price, the coal power price linkage mechanism will tend to be normalized
in the future.
Another industry insider pointed out that the China Thermal Coal Price Index is mainly introduced for the government's
macro-control, especially to improve the coal-power linkage mechanism.
The introduction of the China Thermal Coal Price Index enables the market to clearly understand the direction and magnitude of future electricity price adjustments, which is conducive to power generation enterprises and electricity consumers to make business plans
in advance.

China's coal power price linkage has undergone long-term and repeated exploration
.
On December 15, 2004, the National Development and Reform Commission issued the Notice on Establishing a Coal-Electricity Price Linkage Mechanism, formally deciding to establish a coal-to-electricity price linkage mechanism
.
Between 2005 and 2008, the coal-power linkage mechanism was launched
several times.
However, after 2008, the coal-power linkage mechanism was not strictly enforced
.
During this period, the on-grid tariff for coal-fired power generation also underwent several adjustments, but none of them were in the name
of "coal-power linkage".